NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Sandra Chavez

Achieving deep decarbonization of the global energy system requires energy storage that can store more energy for longer durations. Lithium-ion (Li-ion) batteries, thus far, have played a key role in supporting the integration of renewable energy resources into the electric grid. But as the share of variable renewable energy in power systems increases around the world, new energy technologies that can store electricity for longer durations at low cost are needed. Developing countries present enormous market opportunities for innovative long-duration energy storage technologies that can support the integration of greater shares of variable renewable energy into weak power grids, replace diesel generators, and provide seasonal balancing. However, to realize this opportunity, long-duration energy storage needs to overcome several barriers, including the limited track record of the new technologies and lack of clarity on revenue streams.

In developing countries, where other flexibility options—such as natural gas generation and cross-border interconnections—might not be sufficiently available, low-cost renewable energy generation is on the rise. But although solar and wind power resources are geographically ubiquitous, they are not available all the time. Solar power has a very predictable daily cycle, but cloud cover can reduce solar generation in seconds. At a seasonal level, variations in solar production are low in countries with high photovoltaic potential such as Namibia with a seasonality index of 1.17, one of the lowest in the world. Wind energy, in contrast, exhibits more constant generation during the day but greater variability between seasons. In Brazil, for example, wind power output can be 2.5 times higher in September than in February.